Priscilla Folgosi Castanha
Lawyer at Marcos Martins Advogados
The Bankruptcy and Corporate Recovery Law – Law No. 11.101, of February 9, 2005, profoundly altered Brazilian bankruptcy legislation. The preventive and suspensive concordatas disappeared, the former being replaced by the so-called judicial recovery, which aims to make it possible to overcome the debtor’s economic crisis, thus promoting the preservation of the company, as underlined in art. 47 of the law:
Judicial recovery aims to make it possible to overcome the debtor’s economic and financial crisis, in order to allow the maintenance of the source of production, the employment of workers and the interests of creditors, thus promoting the preservation of the company, its social function and the stimulation of economic activity.
It is worth noting that in judicial reorganization, in principle, the entrepreneur or his administrators are not removed from the management of the company, but are supervised by the judicial administrator.
As was the case under the previous legislation, the current legislation gives preference and privileges to various claims due to the nature of the obligation, resulting in preferences and advantages for some creditors over others, including labor creditors.
In judicial reorganization, the debtor will have a maximum of one year to pay the labor debts due up to the date of the reorganization petition:
Art. 54 – The judicial reorganization plan may not provide for a period of more than 1 (one) year for payment of credits derived from labor legislation or arising from accidents at work due up to the date of the request for judicial reorganization.
The sole paragraph of the aforementioned legal provision establishes the labor credits that must be paid within thirty days:
Sole paragraph – The plan may not also provide for a period of more than 30 (thirty) days for the payment, up to the limit of 5 (five) minimum wages per worker, of claims of a strictly salary nature due in the three months prior to the request for judicial reorganization.
Thus, in judicial reorganization, the debtor must pay, within one year, any salary and indemnity amounts owed to its employees, and up to thirty days for the payment of strictly salary amounts due in the three months prior to the request for judicial reorganization – subject to the limit of five minimum salaries per worker.
It is important to note, however, that labor credits constituted after the request for judicial reorganization will not be part of the plan and will not suffer its effects, having a privileged form of payment as an out-of-court credit. Employees whose employment contracts are terminated after the request for judicial reorganization are therefore guaranteed payment of all their labor claims.
The logical exception is if the judicial reorganization is converted into bankruptcy, when the labor claim is again affected by the legal restrictions.
This is because article 49 of the Reorganization and Bankruptcy Law states that “all claims existing on the date of the petition, even if not yet due, are subject to judicial reorganization”, which is why it can be concluded that labor claims arising after the granting of judicial reorganization are excluded. This is because judicial reorganization does not interfere with the execution of bilateral contracts, including labor contracts, which continue to have their legal effects even after the measure has been granted.
In order to make judicial reorganization and the continuity of the company viable, the Reorganization and Bankruptcy Law also allows the reduction of labor rights to be included in the reorganization plan, the validity of which logically depends on prior and mandatory collective bargaining.
In this sense, article 50, item VIII of the Reorganization and Bankruptcy Law states that “the following are means of judicial reorganization, with due regard for the relevant legislation in each case, among others: item VIII: reduction of wages, compensation of working hours and reduction of working hours, by means of a collective agreement or convention”.
On the other hand, the judicial labor credit only becomes liquid when the amount of the conviction is fixed by sentence, which means that the labor lawsuits are not suspended when the request for reorganization is granted. The lawsuits will continue in the Labor Court in that court, until the amount of the conviction is determined and entered in the general list of creditors for the amount determined in the sentence.
It should be noted that the granting of the judicial reorganization suspends the statute of limitations for all actions and executions against the debtor, for a non-extendable period of 180 (one hundred and eighty) days, counting from the granting of the reorganization, re-establishing, after the expiry of the period, the right of creditors to initiate or continue their actions and executions, regardless of court summons.
According to the majority opinion, there is not necessarily an immediate suspension of labor claims that have already been filed, which, with the statute of limitations suspended, continue to be processed, and after the labor claim has been settled, it will be recognized in the universal court.
The brief considerations presented here show that the Business Recovery and Bankruptcy Law has modernized business law and made it imperative, in view of its effects, to update labor law to absorb its influences on important labor institutes, such as succession of employers, formation of an economic group and depersonalization of the employer, which must be dealt with when seeking the effective preservation of the company and, consequently, of work.
REFERENCES
ALMEIDA Amador Paes de. Labor rights in the judicial reorganization and bankruptcy of the employer. Available at: <http://www.mackenzie.br/fileadmin/Graduacao/FDir/Artigos/amador.pdf>. Accessed on: June 22, 2014.
KONRAD. Carlos Bender. The judicial reorganization of companies and the enforcement of labor claims. Some controversial issues. Available at: <http://www3.pucrs.br/pucrs/files/uni/poa/direito/graduacao/tcc/tcc2/trabalhos2012_2/carlos_konrad.pdf>. Accessed on: June 22, 2014.
